On behalf of the defendant-appellant-cross-respondent,
the cause was submitted on the briefs of Allen A. Arntsen, Michael S.
Heffernan, and Theresa A.
Andre of Foley & Lardner LLP, Madison, and Jon C. Manzo, of counsel, Middleton.

Respondent

ATTORNEYS:

On behalf of the plaintiffs-respondents-cross-appellants,
the cause was submitted on the briefs of Kendall W. Harrison and Steven A. Heinzen of Godfrey&Kahn, S.C.,
Madison.

2008 WI App 126

COURT OF APPEALS

DECISION

DATED AND FILED

July 17, 2008

David R. Schanker

Clerk of Court of Appeals

NOTICE

This opinion is subject to
further editing.If published, the
official version will appear in the bound volume of the Official
Reports.

A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals.SeeWis. Stat. § 808.10 and Rule 809.62.

Appeal No.

2007AP1120

Cir. Ct.
No.2005CV3412

STATE OF WISCONSIN

IN COURT OF
APPEALS

Richard G. McLellan, Rick Bogle, and Primate Freedom
Project,

Plaintiffs-Respondents-Cross-Appellants,

v.

Roger L. Charly,

Defendant-Appellant-Cross-Respondent.

APPEAL
and CROSS-APPEAL from an order of the circuit court for DaneCounty:Sarah
B. O’Brien, Judge.Affirmed in
part; reversed in part and cause remanded with directions.

Before
Dykman, Vergeront and Bridge, JJ.

¶1VERGERONT, J. Roger L. Charly appeals the
circuit court’s order that he convey certain real estate to Richard McLellan
pursuant to an option to purchase.The
circuit court concluded that leaseback and repurchase provisions in the agreement
between Charly and McLellan constituted consideration for the option and Charly
breached the agreement by revoking the option before the expiration of the
specified time period.Charly contends
there was no consideration for the option and, thus, he could revoke it at any
time.He also contends the circuit court
erred in concluding that the interest of third parties was not an appropriate
factor in deciding whether to grant specific performance.

¶2We
conclude that, in order to make the option a binding option contract,
consideration is required that is separate from the consideration for the sale.We further conclude that the leaseback and
repurchase provisions are not consideration separate from the consideration for
the sale.Finally, we conclude that the
other grounds the plaintiffs advance as separate consideration—Charly’s intent
to be bound by the option, Charly’s personal satisfaction, and the efforts of
Rick Bogle, who is not a party to the option, to obtain financing—do not
constitute the requisite separate consideration for the option. Charly was therefore free to revoke the
option. Accordingly, we hold that the
circuit court should have dismissed McLellan’s breach of contract claim in
addition to dismissing the breach of contract claims of Bogle and the Primate
Freedom Project.

¶3With
respect to the plaintiffs’ claims for relief under the doctrine of promissory
estoppel, we conclude Bogle is not entitled to enforcement of Charly’s oral
promise to him under this doctrine and none of the three plaintiffs are
entitled to enforcement of the option under this doctrine.

¶4Because
of these conclusions we need not address Charly’s challenge to the court’s
order of specific performance.

¶5Accordingly,
we affirm the circuit court in part, reverse in part, and remand with
instructions to dismiss the complaint.On remand the court is also directed to vacate its order dismissing
Charly’s counterclaim and enter an order consistent with this opinion.

BACKGROUND

¶6The following facts are taken from the circuit court’s
findings of fact and are not disputed on appeal.The property in dispute is owned by Charly
and located at 26 North Charter
Street in Madison,
between the University of Wisconsin’s Harlow Primate Psychology Laboratory and
the Wisconsin National PrimateResearchCenter.In 2003 and again in early 2005, the
University had expressed to Charly an interest in acquiring the property.Charly said he wanted one million dollars for
the property and nothing further came of those conversations at the time.

¶7In July 2004, Rick Bogle, an animal rights activist, met with
Charly to ask about purchasing the property.Its location was appealing to Bogle because he opposed the work taking
place in the two neighboring facilities.Bogle informed Charly he wanted to use the property for a National
Primate Research Center Exhibition Hall, and Charly said he would sell the
property to Bogle for $750,000.Charly
understood that Bogle had to raise the purchase money.Dr. Richard McLellan agreed to borrow the
money to purchase the property, with the understanding that Bogle would be
responsible for making payments and reimbursing him.In October 2004, Bogle notified Charly that
he had found the money and was moving to Madison.

¶8The parties agreed that Bogle would have an attorney he had
contacted draft an agreement.Charly and
McLellan executed a document titled “Option to Purchase” effective May 10,
2005, that granted McLellan or his assign the option of purchasing the property
for $675,000 within 180 days and permitted the buyer to extend the option for
an additional ninety-day period.The
agreement contained detailed provisions on the terms of the sale, including
leaseback and repurchase provisions.

¶9In June 2005, Bogle organized a rally at the property and
posted a sign reading “Future Home of the National Primate Research Exhibition
Hall,” which contained a picture of a monkey with a device screwed into its
skull.Charly had agreed the sign could
be put up.Soon after the rally, a
University representative called Charly to express its opposition to having the
exhibition hall on the property and said the University was still interested in
the property.Charly responded that he
still wanted $1,000,000 for the property.

¶10Shortly thereafter, Charly took the agreement he and McLellan
had signed to another attorney.In a
letter to McLellan on Charly’s behalf, the attorney stated that the option was
“voidable and void due to lack of consideration” and offered to enter into an
option with different terms.McLellan
declined to do that.

¶11On August 1, 2005, Charly received a proposed option to
purchase from the University under which the University had the option of purchasing
the property for $1,000,000.By notice
dated August 12, 2005, McLellan attempted to exercise his option to purchase
the property but the envelope was returned to him unopened.Through counsel, Charly informed McLellan
there was no enforceable option and he declined to sell the property to him.

¶12McLellan, Bogle, and the Primate Freedom Project, an
organization Bogle founded, filed this action alleging claims for breach of
contract and promissory estoppel and seeking specific performance of the
agreement McLellan and Charly had signed.Charly answered, pleading lack of consideration among other defenses,
and a counterclaim seeking a declaration that neither McLellan nor any other
plaintiff had an interest in the property.

¶13After a trial to the court, the court determined there was
consideration for the option, with the result that Charly could not revoke the
offer to sell the property within the specified time period.The court decided that the leaseback
provision and the repurchase provision in the agreement each constituted
adequate consideration.The court found
Charly had asked for the leaseback provision so that he could continue to use
the property for storage.It found he
had negotiated a reduction in the price in the repurchase provision McLellan
requested, a modification that he, Charly, perceived as having a tax advantage
to him.The court rejected the
plaintiffs’ two alternative theories of consideration—Charly’s personal
satisfaction at selling to someone other than the University and the
plaintiffs’ efforts to obtain financing.With respect to this latter theory, the court found that there was no
evidence that McLellan made any effort to obtain financing and Bogle’s efforts
to obtain funds to repay McLellan could not constitute consideration for the
option given by Charly to McLellan.

¶14Having concluded there was consideration for the option, the
court decided that specific performance was the appropriate remedy, rejecting
Charly’s contention that the court should consider the harm to the interests of
third parties and to the public as a basis for declining to award specific
performance.The court ordered
conveyance of the property to McLellan and dismissed the breach of contract
claims of Bogle and the Primate Freedom Project.The court also dismissed Charly’s
counterclaim.

¶15Although the court’s ruling on consideration made it
unnecessary to address the plaintiffs’ promissory estoppel claims, the court
did so.It concluded they were not
entitled to relief on this alternative ground and dismissed the promissory
estoppel claim of each plaintiff.[1]

¶16Charly’s motion for reconsideration was denied.

DISCUSSION

¶17On appeal Charly contends the circuit court erred in
determining the leaseback and repurchase provisions were adequate consideration
for the option.Among other reasons, he
asserts the consideration required to make an option a binding contract must be
separate from the consideration for the sale and therefore cannot be satisfied
by the terms negotiated for the sale.He
also asserts that the court erroneously exercised its discretion in ordering
specific performance.

¶18The plaintiffs respond that the leaseback and repurchase
provisions are sufficient consideration for the option, even if separate
consideration is required.In the
alternative, they argue that the court erred in rejecting their alternative
theories of consideration.They also
assert the circuit court properly exercised its discretion in granting specific
performance.However, they challenge the
court’s ruling that they are not entitled to relief based on their claims of
promissory estoppel and assert that this is an alternative basis for ordering
specific performance.[2]

¶19We first address the issue whether the consideration required for
a binding option contract must be separate from the consideration for the sale
of the property.We conclude it must
be.We next address the issue whether
there was separate consideration for the option in this case and we conclude
there was not.Finally, we consider
whether the doctrine of promissory estoppel entitles any of the three
plaintiffs to relief, and we conclude it does not.Because it follows from these conclusions
that the plaintiffs are not entitled to an order that the property be conveyed
to any one of them, we do not address Charly’s challenge to the court’s order
of specific performance.

I. Requirement of
Separate Consideration for Option Contract

¶20Whether
consideration separate from consideration for the sale is required in order to
make an option a binding option contract presents a question of law, because it
requires us to decide the correct legal standard.SeeRepublic
Bank of Chicago v. Lichosyt, 2007 WI App 150, ¶24, 303 Wis. 2d 474, 736
N.W.2d 153 (whether circuit court applied correct legal standard is a question
of law).Thus, although this issue was
not raised below, we may address it on appeal. See Apex Elecs. Corp. v. Gee, 217 Wis. 2d 378, 384, 577
N.W.2d 23 (1998).Having given the
parties the opportunity to address this issue in supplemental briefs, we choose
to decide it.

An option to purchase is a continuing promise
or offer given by the landowner to sell real estate to another at a specified
price within a specified period of time.The offer ripens into a binding and irrevocable “option contract” if
consideration is given, but can be withdrawn any time before acceptance if not
based on consideration.Once the “option
contract” or offer is accepted, a contract of sale arises.

(Citations omitted.)

¶22Consistent with Bratt and to avoid confusion, we will use the term “agreement” to refer to the
entire written agreement signed by McLellan and Charly, and we will use the
term “option” to describe the provisions in the agreement that pertain to the
option to purchase, specifically, paragraphs 1 through 5.We will reserve the term “option contract”
for an option that is a binding contract supported by consideration.

¶23We
agree with Charly that, if the consideration required to make an option a
binding and irrevocable option contract could be found in the terms negotiated
for the purchase, then every option would be binding and irrevocable because
there would always be, by definition, at least a purchase price included in the
option.We also agree that such a result
appears inconsistent with the law as articulated in Bratt.However, the court in Bratt did not address
this specific issue because it did not arise, given the facts of that
case.The initial written option in Bratt
recited that the consideration was the receipt of “[o]ne dollar and other
valuable consideration,” but a written extension of the option did not recite
any consideration. Id. at 449-50. The issue before the court was whether the
statute of frauds, then Wis. Stat. § 240.08
(1963), required that the written extension of the option recite the
consideration.Id. at 452-53. The court concluded this was required.[3]

¶24The parties agree that no reported Wisconsin
case expressly addresses whether the consideration required to make an option
to purchase a binding and irrevocable option contract must be separate from the
terms for the sale.However, the cases
they have presented from other jurisdictions and our own research show a
consistent adherence to the rule that there must be some consideration for the
option that is separate from the consideration for the sale of the property, in
order for the option to be a binding contract.[4]Indeed, the plaintiffs have cited no case,
and we have discovered none, in which a court has applied a contrary rule.

¶25The reasoning underlying the rule that there must be separate
consideration for an option contract is that an option contract and a contract
of sale are two separate contracts:the
former is a contract that vests the optionee with the unilateral right to
accept the continuing offer during a stated period of time, while the sale
contract comes into being only if and when the optionee exercises the option.See,
e.g., Foyv. Foy, 484 So. 2d 439, 442-43 (Ala.
1986); Country Club Oil Co. v. Lee, 58 N.W.2d 247, 250 (Minn. 1953); Fru-Con Constr. Corp. v. KFX, Inc.,
153 F.3d 1150, 1156, 1158 (10th Cir. 1998) (applying Missouri
law); Polk v. BHRGU Avon Props., LLC,
946 So. 2d 1120, 1122 (Fla. Dist. Ct. App.
2006).This recognition that there are
two separate contracts and each must be supported by consideration is
consistent with the statement from Bratt, 31 Wis. 2d at 451, cited in paragraph 21
above.

¶26We are persuaded that the rule applied in other
jurisdictions—requiring consideration for an option contract that is separate
from the consideration for the sale—is the proper rule, and we adopt it.It is consistent with Bratt and it flows
logically from Bratt’s recognition that there are two separate contracts.The plaintiffs do not present a rationale for
adopting a contrary rule, and we can see no rationale for doing so.

II. Existence of Separate
Consideration for this Option

¶27Consideration
may be either a benefit to the promisor or a detriment to the promisee.First Wis.
Nat’l Bank v. Oby, 52 Wis.
2d 1, 6, 188 N.W.2d 454 (1971).In
either case, the benefit or the detriment must be bargained for.SeeHansen
v. Firemen’s Ins., 21 Wis.
2d 137, 143-44, 124 N.W.2d 81 (1963).In
deciding if there is consideration to support a contract, courts are not
concerned with the adequacy of the consideration but with “the existence of legal consideration because ‘[t]he
adequacy in fact, as distinguished from value in law, is for the parties to
judge for themselves.’” St.
Norbert Coll. Found., Inc. v. McCormick, 81 Wis. 2d 423, 430, 260 N.W.2d 776 (1978)
(citations omitted). “A consideration of even an indeterminate value, incapable
of being reduced to a fixed sum, can be sufficient to constitute legal
consideration.”Id. at 430-31.

¶28Because
we are reviewing an order entered after a trial to the court, we accept all
findings of fact by the court unless they are clearly erroneous.Wis.
Stat. § 805.17(2).Whether
the court applied the correct legal standard is a question of law, Republic
Bank of Chicago, 303 Wis. 2d 474, ¶24, as is whether the facts found by
the circuit court constitute consideration according to the correct legal
standard. Yao v. Chapman, 2005 WI
App 200, ¶41, 287 Wis.
2d 445, 705 N.W.2d 272.We review questions
of law de novo. Id., ¶21.[5]

¶29The
agreement Charly and McLellan signed contained the following provision:

Consideration
for Option

The parties acknowledge receipt of adequate
consideration for this Option to Purchase. There shall be no payment due seller
for the rights granted hereunder.

¶30The
plaintiffs assert on appeal as they did in the circuit court that this
statement of consideration creates a rebuttable presumption that there was
adequate consideration, citing Wortley v. Kieffer, 70 Wis. 2d 734,
740, 235 N.W.2d 296 (1975) (recitation in a guaranty that consideration exists is
sufficient to raise a presumption that consideration exists).Charly agreed with this proposition in the
circuit court and does not dispute it on appeal.We treat Charly’s failure to dispute this
assertion in the plaintiffs’ responsive brief as a concession that it is correct.SeeSchlieper
v. DNR, 188 Wis.
2d 318, 322, 525 N.W.2d 99 (Ct. App. 1994).

¶31Similarly,
the plaintiffs assert that, because of the rebuttable presumption, Charly has
the burden of showing by clear and satisfactory evidence that consideration was
lacking, citing Jax v. Jax, 73 Wis. 2d 572, 586, 243 N.W.2d 831 (1976) (a
negotiable instrument carries with it a presumption of consideration and the
party challenging a lack of consideration must prove that lack by clear and
convincing evidence). Charly does not
dispute this assertion, either.We
therefore take this as a concession it is correct.See Schlieper, 188 Wis. 2d at 322.

¶32Charly
contends there is no evidence of consideration for the option separate from the
consideration for the sale.In
particular, he asserts that the only consideration the circuit court found—the
leaseback and repurchase provisions—were for the sale, not for the option.The plaintiffs disagree and also assert the
court erred in rejecting three additional bases for consideration.We discuss each of the four potential bases
for consideration.[6]

¶33The
leaseback and repurchase provisions, like all the other terms for the sale of
the property, apply only if McLellan exercises the option within the prescribed
period of time.[7]If McLellan does not do so, there is no contract
for sale and thus no benefit to Charly from these provisions.The plaintiffs argue that the leaseback
provision and the reduction in the repurchase price led to Charly’s decision to
agree to the option.The court did not
make this precise finding.[8]But even if it were these two particular
provisions that led Charly to agree to the option, like all the bargained-for
terms of the sale that benefit the seller, these two provisions are a benefit
to the seller only if the option is timely exercised and a sale occurs.In other words, they are consideration for
the sale contract, but not separate consideration for the option contract.

¶34The
plaintiffs argue that there is a lack of uniformity among the cases from other
jurisdictions as to what constitutes separate consideration and, they contend,
this inconsistency supports their position that the leaseback and repurchase
provisions may constitute the requisite consideration.We disagree.The cases the plaintiffs cite on this point simply show a disagreement
among jurisdictions on when a deposit paid upon execution of the option
constitutes consideration separate from consideration for the sale.CompareMcLamb
v. T.P., Inc., 619 S.E.2d 577, 581-82 (N.C. Ct. App. 2005)($500
deposit that would go toward the purchase price if the option were exercised
and was refundable in full upon the request of the depositing party is not
sufficient consideration for the option), withCountry
Club Oil Co., 58 N.W.2d at 250 ($100 paid for an option that would go
to the purchase price if the option was exercised constitutes the requisite
separate consideration),[9]King
v. Hall, 306 So. 2d 171, 173 (Fla. Dist. Ct. App. 1975) (deposit of
$3,000, which would be returned to the optionee if he did not exercise the
option with fifteen days, constituted sufficient consideration for the option
because it was a detriment or inconvenience to post it and buyer was deprived
of its use while it was posted), andBenson
v. Chalfonte Dev. Corp., 348 So. 2d 557, 559-60 (Fla. Dist. Ct. App. 1976)
(on similar facts there is an issue for jury as to whether there was
consideration).None of these cases
suggest that a benefit or detriment that does not occur unless there is a sale
constitutes the requisite separate consideration for the option.

¶35We
conclude the leaseback provision and the reduced repurchase price do not
constitute consideration for the option contract that is separate from
consideration for the sale contract.

¶36Second,
the plaintiffs contend there is evidence of intent to be bound by the option
contract and, contrary to the circuit court’s ruling, intent to be bound is sufficient
in itself to constitute consideration.We agree with the circuit court that it is not sufficient.

According to
hornbook law, a contract consists of an offer, an acceptance and consideration.
See NBZ, Inc. v. Pilarski,
185 Wis. 2d
827, 837, 520 N.W.2d 93, 96 (Ct. App. 1994). An offer and acceptance exist when mutual
expressions of assent are present. See
id.Consideration exists if an intent to be bound
to the contract is evident.See id.

223 Wis.
2d at 173.The paragraph in NBZ
we were citing to in Gustafson provides in relevant part:

It is
hornbook law that “offer,” “acceptance” and “consideration” are elements of an
enforceable contract.The existence of
an offer and acceptance are mutual expressions of assent, and consideration is
evidence of the intent to be bound to the contract.

185 Wis.
2d at 837 (citing 1 Arthur Linton Corbin,
Corbin on Contracts, §§ 11,
112 (1963)).This statement in NBZ does
not say that evidence of intent to be bound in itself constitutes
consideration; it says that consideration is evidence of intent to be
bound.Indeed, as Charly points out, the
citation in NBZ to Corbin on Contracts
makes clear that intent to be bound is not the same as consideration:

The question “Is consideration evidence of intention to
be bound?” has sometimes been answered yes by those who have regarded
consideration as merely evidence of intention to be bound….However, neither “serious intent” nor
intention to be legally bound is required for an enforceable contract.

¶38Our
statement in Gustafson was an inartful and, no doubt, confusing paraphrase
of NBZ.It was not
a one sentence ruling that established a new category of consideration.There was consideration in Gustafson
in the form of a contingent fee, 223 Wis.
2d at 168, 174, and therefore we had no reason to discuss an alternative view
of consideration. After the one sentence
citation to NBZ in setting forth the background law, we did not mention
intent again in Gustafson. The same is
true of Piaskoski.In that case we
cited the one sentence from Gustafson in setting forth the
background law.Piaskoski, 275 Wis. 2d 650, ¶7.However, there was consideration in Piaskoski
in the form of a mutual reduction in the attorney fees claimed and we
did not again mention the parties’ intent. Id.,
¶¶8, 17.

¶39Third, the plaintiffs argue that the evidence of Charly’s
personal satisfaction at “tweaking” the University constituted separate
consideration for the option.The
plaintiffs emphasize in their supplemental brief that this satisfaction was not
entirely dependent upon a sale taking place and thus it constitutes
consideration separate from that for the sale.This is so, according to the plaintiffs, because the “tweaking” occurred
at least in part when the prospective sale was made public at the rally and
because this publicity resulted in a higher offer from the University, which is
what Charly wanted.

¶40Because the parties did not focus in the circuit court on
consideration for the option separate from consideration for the sale,the court understandably did not refer to
this issue in its factual findings and legal conclusions.The court found that Charly “took personal
satisfaction in selling the
building to Bogle for use as a primate museum … [either] because he was
insulted by a previous offer the UW made … or because he didn’t like … the
animal research facilities in that location.”In concluding this did not constitute consideration, the court reasoned
that it was not bargained for:Charly
did not request it and there was no requirement in the written agreement
between the parties that the property be used for a museum.

¶41We do not address the argument that the personal satisfaction
Charly derived from selling the property for use as a primate museum
constitutes consideration because that satisfaction—even if we were to assume
it could constitute consideration—is not consideration separate from the
sale.Instead, we confine our analysis
to the benefit the plaintiffs assert Charly obtained independent from the sale—Charly’s
personal satisfaction at “tweaking” the University through the announcement of
the prospective sale and the resulting higher offer from the University.We conclude that neither constitutes
consideration for the option because neither was bargained for.

¶42As for the satisfaction Charly derived from “tweaking” the
University with the public announcement of the prospective sale, there is no
evidence he requested that the option be publicized or that a rally be
held.As for the higher offer the
University made after the publicity, that offer—to state the obvious—cannot
logically be the subject of bargaining between the parties to the option.

¶43There is in
addition a more fundamental flaw in the proposition that a higher offer from a
third party prompted by an option can constitute the consideration needed to
make the option a binding option contract:there is no benefit to the optioner unless he or she either breaches the
option contract or the optionee does not exercise the option.

¶44Fourth, the plaintiffs contend that their efforts to obtain
financing constitute consideration for the option, given the evidence that
Charly knew they needed to raise money in order to purchase the property.The circuit court rejected this argument for
several reasons:the agreement in this
case was silent on the buyer’s efforts to obtain financing; the evidence was
that McLellan did nothing in connection with this project between mailing the
signed option back and receiving notification that the option was being
declared void; any agreement between Bogle and McLellan that Bogle would raise
money to pay McLellan could not serve as consideration for the agreement
between McLellan and Charly; and the cases on which the plaintiffs relied from
other jurisdictions were distinguishable because in those cases the agreement
to obtain financing was bargained for.

¶45Focusing our attention on separate consideration for the
option, we, like the circuit court, reject the plaintiffs’ argument.The written agreement is silent on financing.There is no evidence that Charly requested
that anything be done with respect to financing and the evidence is that
McLellan did nothing.

¶46The plaintiffs provide no authority for the proposition that
Bogle’s efforts to raise money to repay McLellan could constitute consideration
for the option Charly gave McLellan simply because Charly knew Bogle was going
to do that.While the cases they cite
hold or support the proposition that in certain circumstances the optionee’s efforts
to obtain financing may constitute the requisite separate consideration for an
option contract, none suggest that the efforts of a person in Bogle’s situation
might do so.SeeRagan v.
Schreffler, 306 S.W.2d
494, 498-99 (Mo. 1957) (option
was supported by separate consideration in the form of the optionee’s efforts
to obtain a loan, where there was evidence that the optioner wanted to sell the
property, the option stated that it was given to enable the optionee to obtain
a loan to purchase the property, and the option also stated that it was agreed
that the optionee’s efforts to obtain the loan “constitute a part of the
consideration for this option”); Mack v. Coker, 523 P.2d 1342, 1344
(Ariz. Ct. App. 1974) (consideration for option existed where option agreement
specifically stated that buyer’s efforts to obtain a loan constituted part of
consideration for the option); White & Bollard, Inc. v. Goodenow,
361 P.2d 571, 575 (Wash. 1961) (consideration for promise to sell existed where
the agreement required buyer to exert best efforts to obtain financing); Schultz
v. Union Cent. Life Ins. Co., 271 N.W. 249, 250-51 (Minn. 1937)
(modification to contract for deed was supported by consideration where seller
benefitted by receiving money, though somewhat less, at an earlier date and
buyers experienced a legal detriment because, at urging of seller’s agent, they
sought a loan and reduced personal expenses to pay off debts in order to
qualify for loan).

¶47In
summary, based on the circuit court’s factual findings, we conclude the
presumption of consideration is rebutted because there is no evidence of
consideration for the option that is separate from the consideration for the
sale.Therefore, the option was not a
binding and irrevocable contract and could be withdrawn at any time before it
was exercised within the prescribed time period.Bratt, 31 Wis. 2d at 451.

III. Promissory Estoppel

¶48The
plaintiffs assert that, if the option is unenforceable because of lack of
consideration, they are entitled to an order conveying the property based on
the doctrine of promissory estoppel.They seek to enforce with this doctrine the oral promise Charly made to
Bogle to sell the property to him for $750,000.They contend that, in reliance on this promise, Bogle took various
actions of which Charly was aware, which included efforts to find financing,
which he was ultimately able to arrange with McLellan, moving to Madison with
his wife instead of continuing to look for teaching jobs, public fundraising
after the agreement between McLellan and Charly was signed, which cost him
approximately $15,000 for the initial mailing, and holding the rally.

¶49In
the plaintiffs’ initial briefing on promissory estoppel they tended to merge
the promise Charly made to Bogle with the promise expressed in the option.[10]We view the two promises as separate bases
for two distinct theories for relief under the promissory estoppel doctrine.Accordingly, we analyze them separately.We conclude that noneof the plaintiffs are entitled to enforcement of either promise.

¶50A
party is entitled to prevail on a claim of promissory estoppel if (1) the
promise is one that the promisor should reasonably expect to induce action or
forbearance of a definite and substantial character on the part of the promisee;
(2) the promise induced such action or forbearance; and (3) injustice
can be avoided only by enforcement of the promise.Skebba v. Kasch, 2006 WI App 232,
¶¶8-9, 297 Wis. 2d 401, 724 N.W.2d 408 (citing
Hoffman
v. Red Owl Stores, Inc.,26 Wis. 2d 683, 698, 133 N.W.2d 267 (1965)).The first two of these requirements are facts
to be found by the fact finder, Hoffman, 26 Wis. 2d at 698, and we therefore apply the
clearly erroneous standard of review to the circuit court’s factual
findings.Wis. Stat. § 805.17(2).The third is a policy decision to be made by the court, Hoffman,
26 Wis. 2d at
698, and our review is de novo.Tynan
v. JBVBB, LLC, 2007 WI App 265, ¶13, 306 Wis. 2d 522, 743 N.W.2d 730.

¶51In
making this policy decision, a court must consider a number of factors in
determining whether injustice can be avoided only by enforcement of the
promise:

(a) the availability and adequacy of other remedies,
particularly cancellation and restitution;

(b) the definite and substantial character of the action or
forbearance in relation to the remedy sought;

(c) the extent to which the action or forbearance
corroborates evidence of the making and terms of the promise, or the making and
terms are otherwise established by clear and convincing evidence;

(d) the reasonableness of the action or forbearance; [and]

(e) the extent to which the action or forbearance was
foreseeable by the promisor.

¶52In
deciding that the doctrine of promissory estoppel did not support enforcement
of Charly’s promise to Bogle, the court made a number of factual findings.It found that Bogle moved to Madison and started fundraising after having
only a couple brief conversations with Charly and it was not reasonable to rely
on a promise “obtained by walking into a store and having a brief conversation
with a stranger about a real estate transaction of three quarters of a million
dollars.” Thus, the court found, Charly
could not reasonably anticipate that his promise would “induce action or [inaction]
of a definite and substantial character” on the part of Bogle.The court also found that the evidence did not
show that Bogle’s move to Madison
and fundraising efforts were to his detriment.It further found that, because of Bogle’s role in the negotiation of the
agreement between McLellan and Charly, Bogle “could not possibly have believed
that he still had a valid offer to sell the property to him.” Finally, the court found that the promise
Charly initially made to Bogle was of a preliminary nature and was never
intended as the final agreement; instead, it was the beginning of negotiations
for a more formal written agreement, for which Bogle obtained an attorney.The court reasoned that the doctrine of
promissory estoppel was not intended to convert contract negotiations into an
enforceable promise.

¶53We
accept the circuit court’s findings because they are not clearly erroneous and
we agree with the court’s policy decision that justice does not require
enforcement of Charly’s promise to Bogle.[11]The evidence supports a finding that, when
Charly offered to sell the property for $750,000, both he and Bogle understood
that they would negotiate the specific terms of the sale, and they did so.The written agreement that resulted was
between Charly and McLellan, with Bogle’s involvement, agreement, and
consultation with counsel.The steps
Bogle took that he claims were to his detriment before the written agreement
between McLellan and Charly was executed—moving to Madison and attempting to obtain financing—were
in furtherance of the anticipated written agreement that did in fact
occur.The steps he took after that—public
fundraising and the rally—were not in reliance on Charly’s promise to him, but
on the written agreement between McLellan and Charly.As the court found, Bogle “could not possibly
believe that he had a valid offer from Charly to sell the property to him” in
spite of the written agreement he was instrumental in negotiating under which
it was to be sold to McLellan.As a
policy matter, in these circumstances justice does not require the enforcement
of Charly’s initial promise to sell the property to Bogle for $750,000.It is fair not to, in effect, revive that
initial promise to Bogle when he was involved with and approved of the written
agreement that evolved from that.[12]

¶54We
next consider the option as the promise potentially affording relief—specifically,
Charly’s written promise to McLellan that he would not revoke the offer to sell
the property on the specified terms to McLellan for 180 days plus an additional
ninety days if McLellan chose.We have
already concluded that Charly’s promise not to revoke the offer was not
supported by consideration separate from that for the sale.We agree with the plaintiffs that this
failure of consideration does not in itself bar enforcement of the promise
under the doctrine of promissory estoppel.In adopting the doctrine in Hoffman, the court explained:

Originally the doctrine of promissory estoppel was
invoked as a substitute for consideration rendering a gratuitous promise
enforceable as a contract.In other words, the acts of reliance by the
promisee to his detriment provided a substitute for consideration….However, sec. 90 of Restatement, 1
Contracts[which the court adopted],
does not impose the requirement that the promise giving rise to the cause of
action must be so comprehensive in scope as to meet the requirements of an
offer that would ripen into a contract if accepted by the promisee.

26 Wis.
2d at 697-98 (citation omitted) (emphasis added).

¶55Charly’s
argument to the contrary is based on case law holding that, where a contract
covers all the details of the relationship between the parties, the doctrine of
promissory estoppel is not a permissible vehicle for, in effect, adding terms
to the contract.See Goff v. Massachusetts Protective
Ass’n, Inc., 46 Wis. 2d 712, 717, 176 N.W.2d 576 (1970) (employment contract
that permitted termination was a complete defense to claim that promissory
estoppel precluded termination); Kramer v. Alpine Valley Resort, Inc.,
108 Wis. 2d 417, 421-22, 321 N.W.2d 293 (1982) (however, even if there is a
contract, if it does not embody all the terms of the business relation between
the parties, it does not bar relief under the doctrine of promissory estoppel);
Teff
v. Unity Health Plans Ins. Corp., 2003 WI App 115, ¶¶53, 61, 265 Wis.
2d 703, 666 N.W.2d 38 (party may not use the doctrine of promissory estoppel to
resort to extrinsic evidence to establish terms of a contract that are not
contained in the plain language of the contract and are inconsistent with it).However, the principle Charly invokes assumes
a valid contract and the point is to prevent relying on promises made but not
included in the written contract in order to add to or modify the terms of the
written contract.See id.This principle is not implicated when there
is no valid contract—here, no valid option contract—because of the lack of
consideration.

¶56We
turn, then, to the question whether Charly’s promise of the option induced
McLellan to take any action or forbearance of a definite and substantial
character.The circuit court, in the
context of its findings on consideration, accepted McLellan’s testimony that he
did nothing in connection with the project between mailing the option back and
receiving notification that the option was being declared void. The plaintiffs point to McLellan’s efforts to
negotiate the agreement with Charly—his consultation with real estate
attorneys, his flying to Madison to meet with Charly, his “work[ing] through
several versions of the parties’ written agreement,” and his signing and having
the contract notarized while he was in Europe. However, these efforts—all typical steps in
negotiating an agreement—preceded Charly’s
promise, embodied in the option provisions of the written agreement, that he
would not revoke the offer to sell on the specified terms for at least 180
days.Based on the circuit court’s
findings, we conclude McLellan is not entitled to enforcement of the option
under the doctrine of promissory estoppel.

¶57For
the first time in their supplemental brief, the plaintiffs argue that we should
consider the actions of Bogle and the Primate Freedom Project that the option
induced them to take.The actions they
identify that occurred after the agreement was executed are Bogle’s fundraising
efforts and organization of the rally.Recognizing that Charly made the promise of the option to McLellan, not
to Bogle, the plaintiffs cite to the Restatement
(Second) of Contracts § 90 (1981), which permits consideration of
action by a third person.It provides in
relevant part:

(1) A promise which the promisor should
reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce
such action or forbearance is binding if injustice can be avoided only by
enforcement of the promise.

(Emphasis added.)In a footnote,
the plaintiffs point out that in Hoffman the supreme court adopted
the predecessor version of this section, which did not have the reference to a
third person.They add that the 1981
version of the Restatement (Second) of
Contracts § 90 (1981) “has since been cited favorably by Wisconsin courts.”However the plaintiffs do not cite the cases or further develop an
argument as to why this court should adopt the revised § 90 version as it
applies to third parties.

¶58We
decline to decide whether to adopt the Restatement
(Second) of Contracts § 90 (1981) insofar as it applies to third
parties.The plaintiffs’ argument on
this point is not developed sufficiently to allow a reasoned analysis.In addition, because they did not make this
argument in the circuit court and instead focused on Bogle’s reliance on
Charly’s oral promise to him, the circuit court’s findings on Bogle’s actions
for promissory estoppel purposes have the same focus.The court did not make critical findings on
whether Charly should have reasonably expected to induce action or inaction by
Bogle as a result of the option he gave to McLellan and did not make other
factual determinations that are necessary to the policy decision of whether
injustice to Bogle can be avoided only by enforcing the option.

¶59Based
on existing law, we are not persuaded that Bogle is entitled to enforce the
option under the doctrine of promissory estoppel. Because the plaintiffs do not present a
separate argument for the Primate Freedom Project, we reach the same conclusion
as to that entity.

CONCLUSION

¶60With
respect to the claims for breach of the option, we conclude that, in order to
make the option a binding contract, consideration is required that is separate
from the consideration for the sale.We
further conclude that the leaseback and repurchase provisions are not
consideration separate from the consideration for the sale.Finally, we conclude that the other grounds
the plaintiffs advance as separate consideration—intent to be bound by the
option, Charly’s personal satisfaction, and Bogle’s efforts to obtain financing—do
not constitute the requisite separate consideration for the option. Charly was therefore free to revoke the
option. Accordingly, we hold that the
circuit court should have dismissed McLellan’s breach of contract claim in
addition to dismissing the breach of contract claims of Bogle and the Primate
Freedom Project.

¶61With
respect to the plaintiffs’ claims for relief under the doctrine of promissory
estoppel, we conclude Bogle is not entitled to enforcement of Charly’s oral
promise to him under this doctrine and none of the three plaintiffs are
entitled to enforcement of the option under this doctrine.

¶62Accordingly,
we affirm the circuit court in part, reverse in part, and remand with
instructions to dismiss the complaint.On remand the court is also directed to vacate its order dismissing
Charly’s counterclaim and enter an order consistent with this opinion.

By the Court.—Order affirmed in part; reversed in part and cause
remanded with directions.

[1] The
court made a number of alternative rulings, anticipating an appeal.This has greatly facilitated our review.

[2] The
plaintiffs’ challenge to the circuit court’s ruling on their promissory
estoppel claims is contained in a cross-appeal.A cross-appeal is unnecessary in order to raise this challenge because
the plaintiffs are not seeking relief that is different than that ordered by
the circuit court.SeeWis. Stat. Rule
809.10(2)(b) (2005-06); Auric v. Continential Cas. Co., 111 Wis. 2d 507, 516, 331
N.W.2d 325 (1983).They are simply
arguing that they are entitled to that same relief on an alternative
ground.We therefore address the
plaintiffs’ arguments on their promissory estoppel claims as though they were
presented in their responsive brief.

All references to
the Wisconsin Statutes are to the 2005-06 version unless otherwise noted.

[3] The
court in Bratt v. Peterson, 31 Wis. 2d 447, 454-55, 143 N.W.2d 538
(1966), did not definitively decide the extension of the option was void for
noncompliance with the statute of frauds because it concluded that further proceedings
were needed to determine whether equitable estoppel prevented that
defense.We note that, unlike the
version of the statute of frauds that was applicable in Bratt, the current
statute does not require consideration to be recited in the writing.SeeWis. Stat. § 706.02.In addition, while Bratt applied the common
law doctrine of equitable estoppel, Wis.
Stat. § 706.04(3) (enacted by 1969 Wis. Laws, ch. 285, § 23) now
contains equitable considerations that permit relief in spite of a failure to
comply with the requirements of § 706.02.

See also 92
C.J.S. Vendor and Purchaser
§ 108 (2008) (“In the absence of consideration, an attempted, or socalled
[sic], option is, in effect, a mere offer” and “[t]he consideration for the
option must be separate and distinct from the consideration for the sale[.]”);
77 Am. Jur. 2d Vendor and Purchaser § 39
(2006) (noting that the consideration for an option must be distinct from the
consideration for the sale in order for the option to be binding prior to
acceptance); 3 Eric Mills Holmes, Corbin on Contracts § 11.7 n.11
(rev. ed. 1996) (“If no down payment were made and [an] option holder merely
promised to pay … in the event the holder exercised the option, there would
have been no sufficient consideration and the so-called ‘option’ would have
been a revocable offer only.”).

[5]The plaintiffs contend that we should give
weight to the circuit court’s legal conclusions because the question of
consideration presents a mixed question of fact and law, citing Yao
v. Chapman, 2005 WI App 200, ¶21, 287 Wis. 2d 445, 705 N.W.2d 272.At that point in Yao, we are discussing a
negligence claim and it is in that context we say that, “[w]hile typically we review
de novo a trial court’s legal conclusions, where, as here, they are intertwined
with the factual findings, we give weight—though not total deference—to the
trial court’s decision.” Id.Later in Yaowhen we discuss whether
there is consideration for the contract claim, we do not defer to the circuit
court on the issue of whether the facts constitute the legal standard for
consideration. We say:

While the
question of whether consideration supports a contract is normally a question of
fact, NBZ, Inc. v. Pilarski, 185 Wis. 2d 827, 838, 520 N.W.2d 93 (Ct.
App. 1994), here the evidence as to consideration is so lacking that we
comfortably state as a matter of law that no contract was achieved. Cf. Siva
Truck Leasing, Inc. v. Kurman Distribs., 166 Wis.
2d 58, 68, 479 N.W.2d 542 (Ct. App. 1991) (In determining whether there
was sufficient consideration for a novation, weight is accorded the trial court’s
decision, but whether the facts fulfill a legal standard is a matter of law.).

Yao,287 Wis. 2d 445, ¶41.Thus, in Yao, we do not view the issue of
consideration as presenting an intertwining of legal conclusions with facts,
which might warrant deference to the circuit court’s legal conclusions.

We also point out
that, while in NBZ we said “[w]hether consideration supports a contract presents
a question of fact[,]” 185 Wis.
2d at 838, we did so in the context of considering the court’s findings on what
occurred in the forming of that contract.We had already used a de novo standard of review to decide the correct
legal standard to apply to the facts.185 Wis.
2d at 835-37. NBZ is thus consistent
with the standard of review we apply in this case—separating the questions of
law from the issues of historical fact and deciding the former under a de novo
standard of review.

Although we are satisfied that
deference to the circuit court’s legal conclusions regarding consideration is
not appropriate, we observe that in this case the plaintiffs would not benefit
from such deference.The legal issues we
decide against the plaintiff regarding consideration are either ones the
circuit court did not decide, seeinfra paragraphs 33-35,—and therefore we
have no legal conclusions from the circuit court to defer to—or they are issues
the circuit court decided against the plaintiffs.See
infra paragraphs 36-46.

[6] In
a footnote, the plaintiffs bring to our attention Restatement (second) of Contracts § 87(1) (1981), which
provides that an offer is binding as an option contract if it “is in writing
and signed by the offeror, recites a purported consideration for the making of
the offer, and proposes an exchange on fair terms within a reasonable
time[.]”This was recently adopted in Texas, 1464-Eight, Ltd. v. Joppich, 154
S.W.3d 101, 110 (Tex.
2004), with the court there acknowledging it to be “the minority position among
the limited number of state supreme courts that have addressed the
question.”The circuit court here
concluded it was bound to apply Bratt, 31 Wis.
2d at 451, because the Wisconsin Supreme Court had not adopted this Restatement
provision. The plaintiffs state in the
footnote that they “do not press the question before this Court, recognizing
that only the Wisconsin Supreme Court can change existing Wisconsin
law.” We therefore do not address this
issue.

Legal possession of Property shall be
delivered to Buyer on date of closing.Occupancy of the Property shall be given to Buyer on date of closing.It is understood the Property is not subject
to any lease at this time, however Buyer and Seller shall enter into a lease
agreement at or prior to Closing whereby Seller will leaseback the Property
from Buyer on mutually agreeable terms.If the Parties fail to enter into a lease at or prior to Closing, the
Buyer may, but shall not be obligated to, declare this Option Agreement null
and void, and if declared null and void by Buyer, neither Party shall have any
further obligations to the other under this Agreement.

….

13. REPURCHASE

The parties agree that at any time within
the twenty-four (24) months following closing hereunder, the Buyer may elect to
provide written notice to Seller requiring Seller to repurchase the Property
from Buyer (the “Repurchase”) upon the terms provided hereunder.The Repurchase price shall be the original
purchase price paid by the Buyer for the Property less the sum of $40,000 and
less the sum of any and all rental payments made by Seller to Buyer as a tenant
during the time Buyer owns the property. …

11.McLellan was concerned that he not get stuck with the
property if Bogle was unsuccessful at re-paying him.At McLellan’s request, Charly agreed to a
provision requiring him to buy the property back from them at an agreed-upon
price.

12.McLellan and Bogle agreed to Charly’s request that he
could rent space back after the sale for his bicycle storage.

[9] We
note that McLamb, 619 S.E.2d at 581-82, and Country
Club Oil Co., 58 N.W.2d at 250, may not be inconsistent because the
latter option contract, unlike the former, did not contain a provision that the
sum paid was refundable upon request.

[10] For
this reason, our order for supplemental briefing included the question “is
there evidence that McLellan reasonably relied to his detriment on the
option….”

[11] The
plaintiffs contend the circuit court did not properly consider the factors
relevant to the policy element.We
disagree.Its factual findings relate to
appropriate factors for that element, some of which overlap with the first and
second elements.We add, though, that if
a court finds either the first or second element lacking, there is no need to
consider the policy element, because all three elements are required.

[12] One
of the defenses Charly raised against enforcement of his promise to Bogle is
that the statute of frauds for conveyances applies, Wis. Stat. § 706.02, and because the promise was oral,
it is not enforceable unless the requirements for equitable relief in Wis. Stat. § 706.04 are met, and
they are not.Section 706.04 provides:

Equitable
relief.A transaction which does not
satisfy one or more of the requirements of s. 706.02 may be enforceable in
whole or in part under doctrines of equity, provided all of the elements of the
transaction are clearly and satisfactorily proved and, in addition:

(1)
The deficiency of the conveyance may be supplied by reformation in equity; or

(2)
The party against whom enforcement is sought would be unjustly enriched if
enforcement of the transaction were denied; or

(3)
The party against whom enforcement is sought is equitably estopped from
asserting the deficiency. A party may be so estopped whenever, pursuant to the
transaction and in good faith reliance thereon, the party claiming estoppel has
changed his or her position to the party’s substantial detriment under
circumstances such that the detriment so incurred may not be effectively recovered
otherwise than by enforcement of the transaction, and either:

(a) The grantee has been admitted into
substantial possession or use of the premises or has been permitted to retain
such possession or use after termination of a prior right thereto; or

(b) The detriment so incurred was incurred
with the prior knowing consent or approval of the party sought to be estopped.

It is not clear
whether the plaintiffs dispute the applicability of Wis. Stat. § 706.02, and, thus, the necessity for
fulfilling the requirements of Wis. Stat.
§ 706.04.However, we
understand their position to be that, if these requirements apply, they are
met.Neither party presents a developed
argument on the relationship between a claim of promissory estoppel and a
defense based on the statute of frauds for conveyances, now that Wis. Stat. ch. 706 has a codified
provision for equitable relief. In U.S.
Oil Co., Inc. v. Midwest Auto Care Services, Inc., in the context of the statute of frauds for
certain other types of contracts in Wis.
Stat. § 241.02, we referred to the well-established rule that
equity may bar a defendant from invoking the statute of frauds, noted that the
doctrine of past performance and equitable estoppel were now codified in
§ 706.04 for real property interests only, and concluded that the statute
of frauds in § 241.02 did not bar a claim of promissory estoppel.150 Wis.
2d 80, 90-91 & n.20, 440 N.W.2d 825 (Ct.
App. 1989).

The circuit court here
did not determine the precise relationship between the promissory estoppel
claim and Charly’s statute of frauds defense.Instead, it concluded that Charly’s promise to Bogle was not enforceable
under either the doctrine of promissory estoppel or the equitable relief
provision of Wis. Stat. § 706.04.We do not understand the plaintiffs to argue
that there is any reason for us to consider Wis.
Stat. § 706.02 and § 706.04 if we conclude the circuit court
properly denied relief under the doctrine of promissory estoppel.Therefore we do not address those statutes.